EU decides on key €90bn Ukraine loan after pipeline deadlock ends

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The European Union is expected to approve a €90bn loan to Ukraine after months of deadlock, following Hungary's agreement to lift its veto. The breakthrough came after Ukraine said it had repaired the Druzhba pipeline, which supplies Russian oil to Hungary and Slovakia, and promised to restore deliveries. The decision, initially set for approval this week, is expected to unlock the first tranches of the loan by mid-May.

The loan, agreed in principle last December, was blocked by Hungary's Prime Minister Viktor Orban since February over the halt in oil supplies through the pipeline, which runs through Ukrainian territory. Hungary and Slovakia, both landlocked, depend on the Druzhba pipeline as their only source of crude.

The EU foreign policy chief, Kaja Kallas, said ahead of a meeting of EU ambassadors that she expected "positive decisions" on the loan, adding that Ukraine "really needs this loan and it's also a sign that Russia cannot outlast Ukraine." Ukraine's Deputy Prime Minister, Taras Kachka, has described the funding as "a matter of life and death" for Kyiv.

Coverage Comparison

Reports from multiple outlets converge on the central narrative: the EU is on the verge of approving the loan after Hungary's veto was lifted, contingent on the resumption of oil flows through the Druzhba pipeline. The BBC, citing EU sources, reported that the loan was agreed last December but Hungary's veto in February over halted oil supplies created a months-long deadlock. Al Jazeera framed the deal as a "bittersweet victory" for Ukraine, noting that the EU's decision came with a "multibillion-dollar gift to Russia," as Ukraine was forced to repair the pipeline to secure the loan.

TASS, the Russian state news agency, covered the story across several reports, emphasizing Orban's position that "no oil = no money," and later confirmed the EU's readiness to disburse the loan. The Hindu highlighted Kallas's expectations and Orban's electoral defeat as a factor clearing the way for the loan.

The timing of the approval varies across reports: French Foreign Minister Jean-Noel Barrot said the EU was ready to disburse the first tranches "as early as mid-May," while other accounts indicated the formal adoption would happen within days. The Cypriot presidency of the EU Council confirmed that the 20th package of sanctions against Russia and the allocation of the €90bn had been approved by ambassadors, with formal adoption by foreign ministers expected within 24 hours.

Key Claims

• The European Union aims to unlock €90bn in budgetary and military financing for Ukraine, as reported by multiple outlets.
• Hungary's Prime Minister Viktor Orban said Budapest's position had not changed: the loan would not be unlocked until Hungary resumes receiving Russian oil via the Druzhba pipeline, a claim carried by multiple sources.
• Ukraine needs the loan to fund the war for another two years, as stated by officials cited in BBC and Al Jazeera reports.
• Landlocked Hungary and Slovakia depend on the Druzhba pipeline as their only source of crude, according to Al Jazeera and BBC reporting.
• The EU banned Russian seaborne crude and refined petroleum products in January and March 2023 respectively, but carved out an exception for pipeline crude, as detailed by Al Jazeera.
• Ukraine attacked the Druzhba pipeline's infrastructure inside Russia, a fact reported by Al Jazeera.
• The EU is ready to begin disbursing the first tranches of the loan in mid-May, as stated by French Foreign Minister Jean-Noel Barrot in an interview with France Info radio, reported by TASS.
• Hungary's veto on the loan was lifted after Ukraine mended the Druzhba pipeline, as reported by several outlets.
• EU foreign policy chief Kaja Kallas expects positive decisions on the loan, as quoted by The Hindu and BBC.

Perspectives

Ukraine: Ukrainian officials and lawmakers express frustration over the conditionality, with parliament member Inna Sovsun calling the arrangement "immoral." Deputy Prime Minister Taras Kachka described the loan as "a matter of life and death." Ukraine insists that Russia must not benefit from the deal, but acknowledges the necessity of the loan for its survival.

Hungary: Prime Minister Viktor Orban has maintained that Budapest will not lift its veto until oil supplies are restored, articulating the position as "no oil = no money." Following his electoral defeat, he remains caretaker leader but has indicated that once deliveries resume, Hungary will no longer stand in the way of the loan. Hungary's energy firm Mol stated it had been informed that oil supplies would resume.

European Union: EU officials, including foreign policy chief Kaja Kallas, welcome the breakthrough as a sign of unity and a signal that Russia cannot outlast Ukraine. French Foreign Minister Jean-Noel Barrot confirmed the EU's readiness to disburse funds. However, an EU summit in Cyprus revealed underlying rifts over Ukraine's EU accession, with leaders divided on the speed of membership talks.

Slovakia: Slovakia, also dependent on the Druzhba pipeline, has supported Hungary's position, as both countries rely on the pipeline for crude oil supplies. No separate statement from Slovak officials was reported in the material.